Minimum Wage in India (2026): State Rates, Labour Codes and Employer Cost

India has no single national minimum wage. Each state and union territory sets its own rates, and the central government sets separate rates for employment in its own sphere, such as central public sector units, railways, mines, ports and airports. To see how these rates compare internationally, our global minimum wage statistics put 195 countries on one monthly basis.

Within a state, the rate depends on four things: the employee’s place of work, their skill category (unskilled, semi-skilled, skilled or highly skilled), the zone (usually city, town or rural) and, where the state still uses them, the scheduled employment or industry. A private company hiring office staff in Bengaluru follows Karnataka’s rates for its Zone 1, not the central rates.

Use the state where the employee actually works, not the company’s registered office. Classify the role against the state’s skill definitions rather than the job title. Check the zone, since Karnataka, Maharashtra, Telangana, Gujarat, West Bengal and Uttar Pradesh all set different rates by area. Then confirm you are using the latest notification, because most states add a variable dearness allowance (VDA) every six months.

All four labour codes came into force on 21 November 2025, according to the Ministry of Labour and Employment: the Code on Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020 and the Occupational Safety, Health and Working Conditions Code 2020. Together they replaced 29 central labour laws, including the Minimum Wages Act 1948, the Payment of Wages Act 1936 and the Payment of Bonus Act 1965.

The final Code on Wages (Central) Rules were notified on 8 May 2026, as were the central rules under the safety code. States are at different stages: by May 2026 Maharashtra, Gujarat, Karnataka, Madhya Pradesh and Delhi had notified rules under all four codes, while West Bengal had not notified any.

India’s floor wage is still the non-statutory National Floor Level Minimum Wage of ₹176 a day, last revised in 2017. A rise to ₹178 was announced in July 2019 alongside the Code on Wages Bill but was never formally notified.

The Code on Wages makes the floor wage statutory: once notified, no state may set a minimum wage below it. In July 2026 the Labour Ministry began work on the figure, updating the consumption basket and setting up a 15-member Central Advisory Board, and the 2026 central rules allow the floor to be revised every five years. No date has been announced.

For employers the current floor has little practical effect, because every state rate in this guide is already far above it. It will matter once a statutory floor is set, if it lifts the lowest state rates.

From 1 October 2026 the central minimum wage for unskilled construction, sweeping and cleaning, and loading work is ₹840 a day in Area A cities, ₹704 in Area B and ₹565 in Area C. The rates include a variable dearness allowance revised every 1 April and 1 October in line with the consumer price index for industrial workers.

The October order (File No. 6/1/2026-VDA, dated 30 September 2026) followed a rise in the average index from 424.80 to 431.42. The April 2026 revision had already lifted Area A unskilled pay to ₹827 a day. Area A covers the major metros, including Delhi, Greater Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Pune, Ahmedabad, Gurgaon and Noida.

The highest unskilled minimum among the main hiring states is Karnataka’s: ₹24,407 a month in Bengaluru since 22 May 2026. West Bengal is the lowest at ₹10,558 in Zone A. The tables below give monthly totals, including any VDA, for the shops and commercial establishments schedule that covers most office and retail hiring. Factories and other scheduled industries can have different rates.

Karnataka overhauled its rates on 22 May 2026, cutting four zones to three and raising pay sharply across 81 scheduled employments. Zone 1 is the Greater Bengaluru Authority area, Zone 2 is the other municipal corporations and district headquarters, and Zone 3 is the rest of the state. Totals include a VDA of ₹1,030.80 a month, which Karnataka now revises once a year.

The notification was issued under the Minimum Wages Act 1948, which the Code on Wages had already repealed, and while related cases were pending before the Karnataka High Court, so its validity is expected to be challenged. Until a court sets it aside, pay these rates.

Maharashtra’s shops and commercial establishments rates include a VDA of ₹4,134 a month from 1 July 2026 and are revised every January and July. The schedule has no highly skilled category.

Tamil Nadu sets shop and establishment rates by job title rather than skill label, across four zones. The rates below include a VDA of ₹7,353 a month and took effect on 1 April 2026 under a notification of 18 February 2026.

Telangana set new basic rates from 1 June 2026 (G.O.Ms.No.6 of 30 May 2026). Zone I is the municipal corporations, including Hyderabad, Zone II the municipalities and Zone III rural areas. A VDA of ₹33.86 a month is added for each point the consumer price index rises above 443, revised each April and October. The order is subject to pending court cases.

Delhi’s rates have stood since 1 April 2025, and the Labour Department confirmed that no dearness allowance order was issued for October 2025. Delhi has one zone. Clerical and supervisory staff are paid by education level: graduates and above earn the top rate shown here.

Haryana raised its minimums by about 35% from 1 April 2026, the largest rise of any main hiring state this year. The rates apply statewide, including Gurugram and Faridabad.

West Bengal revises every January and July. Zone A covers municipal corporations, municipalities, notified areas and development authority areas, including Kolkata; Zone B is the rest of the state.

Gujarat’s rates for 1 October 2026 to 31 March 2027 were notified on 5 October 2026 for 46 scheduled employments. They include a special allowance of ₹72.50 a day. There is no highly skilled category.

Uttar Pradesh made an interim rise of up to 21% from 1 April 2026, after worker protests in Noida, and introduced three wage areas in place of a single statewide rate. A wage board is due to set longer-term rates.

Kerala grades shop and commercial establishment staff from Special down to Grade E and pays a dearness allowance that differs by district. The rates below are from 1 July 2026 and include a ₹200 special allowance. Kerala sets separate, higher rates for the computer software sector.

2026 brought the largest round of state rises in years. Haryana raised its rates by about 35%, Karnataka rebuilt its structure, Telangana and Uttar Pradesh reset their basic rates, and the rest moved with routine VDA revisions.

Under the codes, “wages” means basic pay, dearness allowance and retaining allowance. Listed exclusions, such as house rent allowance, conveyance, statutory bonus, overtime and commission, are left out, but if together they exceed 50% of total pay, the excess is added back to wages.

Wages so defined are the base for PF, gratuity, leave encashment and overtime. Indian salaries have long been built with a low basic and large allowances to keep contributions down, so the rule raises the contribution base for many existing structures. A March 2026 government clarification confirmed that overtime counts within the 50% calculation.

Gratuity is the bigger effect, because it is uncapped up to ₹20 lakh and runs off the full wage base. PF is limited by the wage ceiling: contributions are mandatory on wages up to ₹25,000 a month, so in this example the compulsory employer PF rises from ₹2,400 to ₹3,000 a month. Employers can pay on higher wages voluntarily.

At the Delhi unskilled minimum of ₹18,456 a month, statutory contributions and accruals add about ₹5,423, taking the monthly cost to ₹23,879, or about US$247. That is 29.4% on top of the wage. The figure assumes the whole minimum is paid as basic wages and the establishment has 20 or more employees, so PF and statutory bonus apply.

The employee also contributes 12% to PF (₹2,215) and 0.75% to ESI (₹138), so take-home pay at this minimum is about ₹16,103 before any professional tax. Delhi levies none.

The percentage falls as pay rises. ESI stops above ₹21,000 a month, bonus eligibility ends at the same level, and mandatory PF stops growing at ₹25,000. For a salaried professional the statutory load is usually 13% to 18% of basic wages, mostly PF and gratuity. To model a specific salary, use the EOR cost calculator or the calculator in the India hiring guide.

Every employee earning up to ₹21,000 a month in an establishment with 20 or more staff is entitled to an annual bonus of at least 8.33% of wages, rising to a maximum of 20% depending on the company’s allocable surplus. The bonus provisions of the Code on Wages replaced the Payment of Bonus Act 1965.

For employees earning more than ₹7,000 a month, bonus is calculated on ₹7,000 or the applicable minimum wage, whichever is higher. Notifications of 25 August 2026, applied from 21 November 2025, confirmed both the ₹21,000 eligibility limit and this calculation ceiling. With every main state’s minimum now well above ₹7,000, the minimum wage is in practice the base for most eligible staff.

A worker on any state minimum wage pays no income tax. Under the new tax regime, which is the default, the rebate wipes out tax on taxable income up to ₹12 lakh a year, and the ₹75,000 standard deduction lifts the zero-tax point for salaried staff to ₹12.75 lakh. The 2026 Budget kept the slabs and rebate unchanged.

Employers must still register for tax deduction at source, deduct tax monthly from salaries above the threshold and file quarterly returns. The Income-tax Act 2025 replaced the 1961 Act from 1 April 2026, but the salary withholding mechanics are the same.

Many states, including Karnataka, Maharashtra, Tamil Nadu, West Bengal and Gujarat, levy a professional tax that the employer deducts from salary and pays to the state. The Constitution caps it at ₹2,500 a year per person, and the slabs and registration rules vary by state. Delhi does not levy it.

The labour codes cap work at 8 hours a day and 48 hours a week, with at most six working days in a row before a rest day. Overtime is paid at twice the ordinary rate of wages, needs the worker’s consent and, under the central safety rules, is capped at 144 hours a quarter.

A four-day week is allowed, not required, as long as the weekly cap and overtime rules are met. Office staff in shops and commercial establishments are also covered by their state’s shops and establishments law, which sets opening hours, weekly holidays and sometimes lower overtime caps. Check both.

Annual leave under the safety code is one day for every 20 days worked, for workers with at least 180 working days in the calendar year, or about 15 days a year. Up to 30 days can be carried forward, and leave above that can be encashed. Office staff in most states also get the earned, casual and sick leave set by the state’s shops and establishments law, and employers apply whichever is more generous.

Our guide to maternity and paternity leave in India covers eligibility, pay, the creche rule and common employer policies.

Retrenching a worker under the Industrial Relations Code takes one month’s written notice or pay in lieu, plus compensation of 15 days’ average pay for each completed year of service. The employer must also pay 15 days’ wages per retrenched worker into a new Worker Re-skilling Fund.

Final wages are due within two working days of resignation, termination or retrenchment under the Code on Wages, and gratuity within 30 days. Managerial and supervisory staff often fall outside the “worker” definition, so their notice and severance usually depend on the contract.

The minimum wage sets the floor for entry-level, support and blue-collar roles; it is not a benchmark for professional hiring. It matters most in construction, logistics, warehousing, retail, security and facilities work, where many employees are paid at or just above it.

Graduate pay can sit closer to the floor than foreign employers expect. Entry salaries at India’s largest IT services firms are still reported at about ₹3 lakh to ₹3.1 lakh a year (People Matters, February 2026), or roughly ₹25,000 a month. In Bengaluru, Karnataka’s skilled minimum is now ₹29,316 a month, so check how a role is classified before copying an old offer letter.

Living costs differ widely between metros and smaller cities, and housing drives most of the difference. Employers hiring in Bengaluru, Mumbai, Delhi NCR or Hyderabad rarely pay at the minimum, even for entry roles, because candidates expect more and attrition is costly. In tier-2 cities, pay near the minimum is more common for support roles.

Paying less than the minimum wage is punishable by a fine of up to ₹50,000 for a first offence under Section 54 of the Code on Wages. A repeat offence within five years can mean imprisonment for up to three months, a fine of up to ₹1 lakh, or both.

Inspectors now act as “inspector-cum-facilitators” and can give employers a chance to fix a breach before prosecution, and first offences punishable only by a fine can be compounded for half the maximum. The employer must still pay arrears, and late PF and ESI contributions carry interest and damages.

Applying one state’s rates to staff in another. Classifying skill by job title instead of the state’s definitions. Missing a VDA revision, which leaves pay short from the effective date. Keeping basic pay low and topping up with allowances, which can breach both the minimum wage and the 50% rule.

A foreign company cannot put employees on its own payroll in India without a registered entity. The options are to set up a private limited company or branch, or to hire through an employer of record that employs staff on your behalf.

Setting up a company takes months and brings PF, ESI, professional tax, shops and establishments registration and labour code filings in every state where you have staff. Our comparison of an EOR vs a private limited company in India sets out the costs and timelines for each route.

An EOR is the legal employer in India. It issues appointment letters under the labour codes, runs payroll at the correct state rate and VDA, registers and pays PF, ESI, gratuity and bonus, and handles tax deduction and final settlements. It is often the quickest way to hire remotely, and it shows how an EOR simplifies multi-state compliance.

Compare providers in our guide to the best EOR providers in India, see typical fees in the EOR pricing index, and read the India hiring guide for costs at every salary level. Foreign nationals working in India need an employment visa, covered in our EOR visas and work permits guide. For a wider plan, see how to build a borderless workforce.

Short answers to what employers ask most about India’s minimum wages, the labour codes and the real cost of a minimum-wage hire, checked against central and state notifications on 24 October 2026.